Constituting Development in Somaliland

Constituting Development in Somaliland Development, Democracy, and Institution-Building Mercatus Center George Mason University October 7, 2009 Sujai Shivakumar PhD Board on Science, Technology and Economic Policy The National Academies

The 21 st Century Challenge
Numerous independent nation states emerged in the 20th Century…
End of European Imperialism
Marxist-Leninist Revolutionary Struggles
.. but many have not succeeded
Development Failures, State Failures
Plunder and Pillage; Humanitarian Crises
How to achieve democratic governance in the 21st Century?
How do we achieve stable, self-governing societies?
How do we address the Challenge of Development?
Sujai Shivakumar PhD

The Constitutional Challenge Sujai Shivakumar PhD
Whether human societies are capable of establishing good government from refection and choice, or whether they are destined to depend for their political constitutions on accident and force
Alexander Hamilton, The Federalist

Focus on Somaliland

Somali Society
Clan structure remains the bedrock foundation of the pastoral Somali society
The primacy of clan interests is its natural divisive reflection at the political level.
The viability of the blood compensation paying group depends primarily on how wealthy the members are.
As long there is a social need for the dia-paying group, the traditional structures will persist.
Somali customary laws
Xeer can be contracted into - and out of – and, according to need, contracts can be abrogated, modified, rescinded or new ones made.
Basis of new Somaliland constitution

A Recent History of Somaliland (in Brief)
British Somaliland (1899-1960)
Ruled from British India; Provided security to the Suez Canal and safety for the Empire's vital naval routes through the Red Sea and the Gulf of Aden
Briefly conquered by the Italians during WWII
Merger with Somalia
1967 Coup by Siad Barre, who instituted a Marxist regime, and became a close ally of the Soviet Union
Disenchantment with Somalia as SL is marginalized in government
Civil War
1981- 1990: Somali National Movement seeks to topple Barre
Barre responds with areal bombings
Independence (1991)
Somaliland asserts independence—Still remains unrecognized
Inter-clan conflict continues through mid-1990s
Peace conference (1993) and gradual fall in violence; Rebuilding begins
Mid to late1990s—New Constitution adopted

Today’ Presentation
Institutions and Development
Development as Adaptive wellbeing through Collective Action
Institutions as Technologies for Successful Collective Action
Assessing the State as an Institution
Limits of State-led Development
Role of Democracy in Development
Constituting Somaliland
“ Starting from Here”

Institutions and Development Technologies for Successful Collective Action

The Meaning of Development
Development concerns the realization of our adaptive wellbeing through productive association with others
Institutions matter for development
Represent a shared understanding of rules needed for collective action
We need to recognize and renew these shared institutional resources
Many assume state provides institutional basis for development

State Governance & Development
Traditional Interpretation: Development as Transformation
Features of a “developing” country  Features of a “developed” country
Aid to facilitate this process by filling gaps
Role of the State is to transform society from developing to developed status
Agents of state to formulate and administer policies
Constitution typically recognized as a charter describing the organization of the state and legitimizing coercion by the state
The State often does not provide the institutional basis for this transformation

What is an Institution?
They are rules, socially considered
By structuring human interaction, they
Help each anticipate the actions of others
Reduce uncertainty, promote coordination and cooperation
To be successful, rules must be
Reliable —triggering consistently in similar circumstances
Recognizable —subject to broad awareness
Non-arbitrar y—seemingly dependant on general principles

Institutions and Development
Institutions are important because successful collective action is needed for growth and development
We need to cooperate successfully to grow food, build roads, maintain safe neighborhoods, etc.
Successful collective action also needed to craft and maintain rules of the market and collective decision-making
When the social technologies for collective action are kept in good repair, we are better off
Citizens are better equipped to solve problems
Well maintained institutions ensure our improved adaptive well being

Addressing Collective Action Situations lies at the Heart of Development
Collective Action Situations exist where contributions from multiple actors are required to produce joint outcomes
Collective Action Problems occur when unresolved
Motivation Problems and
Information Problems
… create sub-optimal outcomes

Motivation problems
Social Dilemmas: Potential conflict between individual gain and collective benefits
Provision of public goods (public safety, health, knowledge, etc.)
Provision and maintenance of common-pool resources (protection of forests, wildlife, species, lakes, rivers, oceans, atmosphere)
If benefits can be obtained by an actor without contributing, temptation always exists to free ride on the efforts of others. May also face overuse.

Information problems
Missing information
Time and Place Knowledge
Knowledge of local realities, rules, and relationships
Asymmetric information
Moral Hazard
Principle-agent problems
Signaling Problems
Fiscal Illusion (Policy Context)

Societies around the world have variously developed institutional solutions to these problems Are these problem-solving technologies still relevant?

An example of an Institutional Solution to a Free Rider Problem
Free riders are those who seek to benefit from the actions of others without contributing their share of the effort
Solution: Ubudehe in Rwanda
Ubudehe is rooted in a long history of inclusive community participation in tilling fields for planting crops
Found among the Hutu and Tutsi communities in Rwanda, long before genocide of the 1990s

An example of an Institutional Solution to a “Tragedy of the Commons” Problem
The Tragedy of the Commons refers to a failure of cooperation in the shared use of a Common Pool Resource
When needed institutions are absent, individuals may be motivated to use more than their share of a limited but openly available resource
Leads to non-sustainable use and degradation
Solution: Xeer in Somalia
Expectations for arrangements to share scarce grazing land and water sources among nomadic pastoralists in northern Somalia

People everywhere face challenges of collective action
In developed countries, well adapted networks of institutions generally lead to productive outcomes
In poor countries, individuals often face negative incentives, making it difficult to
invest in economic activities
Provide public goods
Improve communally held resources
This failure of social cooperation is rooted in a variety of social dilemmas that remain unsolved—there are no relevant institutions

Crafting Solutions to Collective Action Problems
A Complex task …
Collective Action Problems are often highly localized
Social dilemmas are numerous and often difficult to diagnose
Different interests and theories about working properties of rules can make agreement difficult
… but one that is necessary
Existence of institutions like ubudehe and xeer show that it is possible

Crafting Solutions to Collective Action Problems
Improving development requires a focus on the multiple contexts within which citizens can identify and craft solutions to problems of collective action
This perspective differs from the State-centered approach to development

Ideology of the State
The State as the Preeminent Tool for Development
Rulership
unity of power to maintain unity of law critical for social harmony—Hobbes
Governance
Bureaucratic Public Administration—Weber & Wilson
Aggregate data  Develop Policy  Implement Policy
This ideology still widely articulated
But is the State competent to address the range of collective action problems facing its subjects?

Is the State Competent?
The Knowledge Problem
Agents of the state cannot gain “knowledge of time and place”— Friedrich Hayek
The Motivation Problem
Possibility of self-seeking and opportunistic agents of the state — James Buchanan
The Intellectual Crisis of Public Administration
Ideology of state stifles modes of creative inquiry and participation among citizens in solving problems of collective action — Vincent Ostrom

Failures of the Ideology of the State
The emphasis on state-led development has often ruined capabilities for locally based problem-solving
The results have often been catastrophic
Rwanda
Indigenous institutions like ubudehe have been overlooked in favor of the “modernizing” potential of the state
Resulting deterioration of networks of trust contributed to the genocide
Somalia
UN imposed constitution failed to account for local institutional resources, like xeer
Somali rulers exploited indigenous institutions to stay in power, fraying the constitutional fabric of society
Resulting in famine, civil war, state collapse

What is the alternative?
Begin with the recognition that failures of development are rooted in institutional failures
The state often does not address underlying problems of collective action
Organization of state often fosters perverse incentives of its own
Need to develop an alternate approach to the puzzle of development
One based on a deeper understanding of democracy and constitutional government

The Meaning of Democracy Foundations of Constitutional Governance

The Role of Democracy in Development
Democracy concerns the norms of inclusion in public discourse and decision making
Participation and Debate
Ensures that policy decisions draw on knowledge that individuals have of their own time and place
Consensus
Helps strengthen common understandings about new decisions and rules—creating an institutional basis for successful collective action

Centralized Democracy?
Popular view equates democracy with elections of representatives to a national government
Some believe that party politics associated with elections interfere with State’s ability to govern wisely
Idea underpins current efforts in “Nation-Building”
Centralized democracy can lead to ‘political free-riding’ that stifles local initiative and problem-solving
Tocqueville

Polycentric Governance
Tocqueville, in Democracy in America , described a system of:
Multiple overlapping arenas of political authority
Various scales, from community organizations, to state government to national government
Governance structures are adaptive framework for problem-solving
World Wide Web is a modern example
Role of public entrepreneurship in seeking solutions to problems of collective action

Foundations of Constitutional Governance
Constitutionally Constrained Democratic Governance
Focus on collective action within institutional constraints
Citizens addressing their common needs through the freedom to integrate their actions with those of others within crafted rules and innovated institutional arrangements
The Challenge: Crafting a system of interlinked problem-solving arenas

Achieving a Self-Governing Civilization Starting from Here Building on Indigenous Institutional Foundations

Starting from “here”— Why?
We have to deal with indigenous institutions because they represent existing communities of understanding
Yet, we must recognize that evolved institutional forms, presented as indigenous or traditional do not necessarily denote optimal or even acceptable solutions to prevailing collective action problems

Starting from “here”— How?
Challenge lies in developing and modifying existing rules and constitutional amenities
Need to harness more effectively the problem solving potentials latent in various locally focused indigenous institutions
Need to draw on existing mechanisms/ shared concepts to encourage rule change
Normative bases for rules—conjectural evolutionary claims

Reviving indigenous capabilities for problem-solving
Ubudehe is being revived in Rwanda today
Focused on cellule level to rebuild local institutions and to encourage individuals to solve problems in association with each other
Xeer is underpinning new governance structures in Somaliland
Concept of covenanting now used to craft and maintain collective action institutions
A major Challenge of Development is to draw on such indigenous practices in crafting capabilities for self-governance

Crafting Capabilities for Self-governance in Somaliland
A challenging environment
Civil conflict following the collapse of the Somali State
Clan-on-clan violence exacerbated by destruction of common pool resources
Recognizing the underlying collective action problem
Tragedy of the Commons  Conflict over Resources
Leveraging existing institutional capital: “Xeer”
Traditional ad hoc arrangements to share grazing land and water sources among nomadic pastoralists in northern Somalia
Action-Aid drew on clan traditions to craft new institutional arrangements before delivering aid

Constituting Somaliland
Today, Xeer is underpinning new governance structures in Somaliland
Concept of covenanting now used to craft and maintain collective action institutions at various levels
The broader Challenge for Development in Africa and elsewhere is to draw on such indigenous practices in crafting capabilities for self-governance

Somaliland’s “Success”
The chaos in Somalia obscures a remarkable political development in Somaliland.
Somaliland, which declared its independence in 1991, has
held three consecutive competitive elections since 2001,
has a parliament with opposition parties, and
boasts a growing economy propelled by the private sector.
The key to its success
The integration into politics of traditional Somali models of governance by consultation and consent
A contrast to the standard development paradigm

To Conclude Achieving a Self-Governing Civilization

Achieving a Self-Governing Civilization
Alexander Hamilton
Presumption that societies of men and women can choose good government through reflection and choice
Federalism as the foremost theory of citizenship
Alexis de Tocqueville
A new age of democracy will only succeed to the degree that it developed a new science of politics that is based on principles of association, rather than on the ideology of state

Achieving a Self-Governing Civilization for the 21 st Century
The challenge of Constitutional Political Economy lies in looking beyond the ideology of state governance
Need to understand the nature of collective undertakings with reference to:
Multiple levels of governance
Multiple sources of adaptation

Thank you Sujai Shivakumar, PhD The National Academies 500 Fifth Street NW Washington DC 20001 Tel: 202 334 1337 Email: sshivaku@nas.edu

Agenda for Future Research: Recovering from State Failure
Analyze link between Institutional conditions and Development Sustainability
Impact on Aid on Successful Collective Action
Study local institutions and local governance structures
Recognize role of indigenous institutions
Modernize institutions to address contemporary challenges
Reconciling Bottom-up and Top-down governance
Incentives to recognize and nurture local/indigenous institutions
Training in Institutional Analysis
Build capacity to recognize and leverage existing institutional potentials

Publications
The Constitution of Development
Crafting Capabilities for Self Governance
Palgrave Macmillan
The Samaritan’s Dilemma
The Political Economy of Development Aid
With Elinor Ostrom, Clark Gibson and Krister Andersson
Oxford University Press

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Constituting Development in Somaliland

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